US bans DeepSeek from federal agencies as report links it to Huawei chips

What happened: The US ordered DeepSeek out of federal civilian agencies, which must also drop apps built on its AI. Homeland Security says the app may track and fingerprint users, and the order says government workers' prompts could send sensitive data to China. The same day, The Information reported Huawei engineers have worked inside DeepSeek's offices to help design AI chips, which could help China build top AI without Nvidia. Last month DeepSeek released free tools for running its AI on Huawei chips.
Austin's take: Austin sees AI splitting into US and China sides, from apps to chips, and views advanced chip work as a strategic defense matter. He notes it follows several strong US open source releases and wonders whether enterprises will follow the government's lead.
Why it matters: It deepens the split between US and Chinese AI ecosystems and may push businesses to choose sides.
What to do: If your organization uses DeepSeek or apps built on it, review what data goes into it. The ban doesn't apply to individuals.
Not confirmed yet: The Huawei chip report rests on unnamed sources. The ban covers only civilian agencies, not individuals.

The Loop